Lesser-known Greenwich hedge funds make top performers' index

Tim Loh

Published 10:01 pm, Thursday, January 9, 2014

They're not investors most people have heard of, but three Greenwich-based hedge funds cracked the world's top 30 in terms of performance last year.

Bloomberg's "Top-Performing Large Hedge Fund" list for 2013, which will be published in the February issue of Bloomberg Markets magazine, will feature near the top portfolios managed by JAT Capital, AQR Capital and Blue Harbour Group -- three firms headquartered within about a mile of each other, from Greenwich Avenue down to Greenwich Harbor.

"It's good PR for the firms and it also gives average readers some insight into the hedge fund world," McGuire said, when asked to characterize the value of the ranking. "I would not recommend making investment decisions based upon a list in a magazine, but for what it is, it's fine."

The survey draws on data compiled by Bloomberg, and supplied by hedge-fund research firms, hedge funds and investors during the first 10 months of 2013, according to a story that appeared Tuesday on the Bloomberg website.

Thaler ranks 17th

Through Oct. 31 of last year, the Standard & Poor's 500 Index had soared 25.3 percent, which only 16 large hedge funds -- with more than $1 billion in assets -- were able to muster. The industry average for those 10 months was only 6.9 percent, Bloomberg reported.

Squarely hitting the S&P mark was JAT Capital Offshore, which is managed by Greenwich resident John Thaler at JAT Capital Management. The firm was launched in 2007 and is located at One Fawcett Place, just off Greenwich Avenue. Its winning fund, which ranked 17th on the list, employs a "long-short equity" strategy, had a return of 25.3 percent and has assets of $1.9 billion, Bloomberg reported.

Coming in 22nd was AQR Style Premia Strategy, a "multi-strategy" fund managed by AQR Capital Management. The firm was founded in 1998 and is located at Two Greenwich Plaza, right next to the town's main train station. The fund had a 21.5 percent return and has assets of $1.2 billion, Bloomberg reported.

Finally, Blue Harbour Group's 30th place fund -- Blue Harbour Strategic Value Partners -- returned 19.8 percent and has assets of $1.3 billion, Bloomberg reported. Blue Harbour is located at 646 Steamboat Road, an office building that overlooks Greenwich Harbor. The firm was founded in 2004 by Greenwich's Clifton Robbins.

The fact that so few hedge funds could keep pace with the stock market was no surprise for Walter Dolde, associate professor of finance at the Stamford branch of the University of Connecticut.

"It's always the case that the average hedge fund fares poorly when the S&P has a really strong year," Dolde said. "A true hedge fund is trying to make returns that are uncorrelated with what the broad stock market does." Dolde added that too many investing outfits these days get lumped under the umbrella term "hedge fund" when they're really nothing more than market speculators.

SAC Capital missing

No other Connecticut-based hedge fund made the list of top 30 performers. Nor did any Connecticut-based firms make the list of the 25 best-performing midsized hedge funds, which Bloomberg classifies as funds with assets of $250 million to $1 billion.

The year's top large performer was Larry Robbins' $1.8 billion Glenview Capital Opportunity Fund, which is based in New York and rose about 84 percent on the back of bullish bets on U.S. stocks and healthcare companies, Bloomberg reported.

Notably absent from this year's list was Stamford's SAC Capital, the most profitable fund on the 2012 Bloomberg list -- having paid about $790 million to Cohen and his managers, Bloomberg reported.

SAC Capital wasn't counted this year because it's in the process of returning outside investor money after pleading guilty in November to insider trading.

Meantime, Westport-based Bridgewater Associates also missed the list. Its Pure Alpha II fund returned just 6 percent through October 2013, Bloomberg reported.